The proportion of companies with non-investment-grade ratings whose debt is trading at distressed levels has soared from close to zero roughly 18 months ago to a majority for the first time since records began, in a further stark sign of the lack of liquidity and the broader dislocation in the credit markets.

New figures published by Moody’s Investors Service revealed that the credit rating agency’s distressed index reached 53.1% at the end of last month, marking the first time the index has topped 50% since records began in 1996.

The Moody’s index, which uses data from Merrill Lynch for the period before October 2002, tracks the number of issuers with debt whose option-adjusted spreads or credit default swaps trade at more than 1,000 basis points, as a proportion of the total number of non-investment grade issuers.

The index recorded a low single-digit percentage in the middle of 2007, but has since surged.

Moody’s, whose default rate for non-investment grade issuers quadrupled last year, said: “Consistent with the upward projection in default rates, the distressed index came in at 53.1%, an all-time record high. The index began to increase in the summer of 2007 and spiked sharply in the final quarter of 2008.”